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***Includes an update for Sepember 2018***
My daughter turned 3 at the end of March, which is a bonus in itself – as if she’s waited until her due date on the 3rd April, we wouldn’t have received the 30 hours funded childcare until September! When she first started nursery aged 12 months and I returned to work, this day seemed like a long way off (and a lot of nursery fees in the meantime).
A few months ago, with the date in sight, myself and my husband began to wonder exactly how much money we were going to end up saving once the 30 funded hours kicked in. As our daughter only attends nursery 2 days a week from roughly 8.00-4.30, initially (and niavely, haha) we wondered if her entire place may end up funded. Unfortunately this is not the case! So I thought I would write this post for those of you in the same situation so you can be a little bit more clued up than we were.
What is the 30 free hours childcare funding?
The government introduced this scheme on 1st September 2017, increasing the number of funded hours for 3 and 4 year olds from 15 to 30 per week. However there are limitations on what is offered. For instance, just like the universal 15 hours, they are only available for the weeks of the school term, meaning that the places are only funded for 38 weeks of the year.
Who qualifies to receive this funding?
- Anyone who is earns more than 16 hours at the national minimum wage per week. This does not mean you need to be working 16 hours or more per week to qualify. For example, if you worked 8 hours a week for £30 an hour then you would be eligible.
- Anyone who earns less than £100,000 a year. Let’s face it – if you earn more than this then you are unlikely to be reading a money saving blog but who knows?!
Do I receive anything if I don’t qualify?
Yes – you can still receive the 15 hours funded childcare which is universal.
When do we receive the funding?
From the term after you child turns 3. You need to apply a couple of months before they turn 3 to ensure the application is processed in time, otherwise you may have to wait until the following term. If your child is born in:
Sept – Dec: You will receive funding from the following January
Jan- March: Receive funding from April
April – August: Receive funding from September
What’s the catch then?
There are no hard and fast rules on how the 30 hours funding can be applied and many childcare providers will have their own rules on what can be claimed for, and add on extra costs. Some may not even offer the 30 hours at all.( I would say if you are looking at providers now this is a big point to check before enrolling your child as I can’t think of anything worse than uprooting a happy, settled 3 year old down the line in order to claim funding elsewhere. )
For example, our daughter only attends 2 days a week, but the nursery made it clear that only children attending 3 days or more would be eligible for the 30 hours funding. The reason why will become clear below, although every setting will have their own policies so this is not to say the case will be the same for everyone. Additionally, we could split the funding between the nursery and another setting if we wanted to claim our additional hours that way. Because I am fortunate enough to only work 3 days a week and have a day’s free childcare a week from my mother in law, we didn’t need this option.
As stated above, the funding is only eligible for the school term times or 38 weeks a year. Some settings may close, mirroring the school holidays; childminders or private nurseries like my daughter’s may charge for the holidays, or offer to add on 12 week’s full price childcare and divide it up over the year to make the holidays more affordable. The latter is what our nursery offers.
The times for the funded hours may also mirror the school days and a wrap around daily fee may apply. For example, my daughter’s place is free between 9am and 3pm, mirroring roughly the hours of a school day. But as the nursery opens at 7.30am and shuts at 6pm, we are charged a fee for these hours (even though she doesn’t get dropped off till 8am and picked up around 4.30pm, because these times aren’t fixed and we are free to access the earlier / later times, we are charged a flat rate for these hours whether she is there or not). This means that we actually only receive 12 hours a week funded (9am-3pm 2 x days a week) instead of the original 30!
If I was a stay-at-home mum or in a job that allowed me to drop off and pick up between 9-3, then I would not be charged anything for these hours, and this option was offered to me by the nursery, but it just wouldn’t work with our jobs.
Childcare providers can also charge for optional extras such as meals and snacks. Again this cost is added into our monthly charge.
So, what do I actually end up saving then?
Before the funded hours kicked in we were paying £433 per calendar month for 2 days a week at nursery including all meals and snacks. This has now decreased to £303 a month – so a saving of over £100 but still not anywhere near what we hoped! As we both paid into the tax free Childcare Vouchers scheme directly out of our wages, my husband has continued to pay the maximum tax free amount of £243 a month. I have reduced mine from £190 to £70. You may notice we are slightly overpaying into the voucher scheme but this is to create a buffer for price rises and emergency extra days.
Now I have reduced my payment I am coming out with approximately £60 a month more in my pocket. Again, not to be sniffed at, but we had originally anticipated much more!
Of course, if we were paying for 3,4 or 5 days we would see bigger savings, but would have been paying a lot more for the first 2 years to begin with.
UPDATE: We have now recieved our statement for Seprember 2018-August 2019. We were pleasantly surprised to find it has gone down by another £50 a month to £253.00. This is because our first statement was April – August, so we recieve more free hours as it is for more months. It has meant I can now reduce my payment to £15 from £70 and what was £190. (My husband still pays his full allowance of £243). I have yet to see how much this will be in my wages but hopefully another £40-50, so in total I should hopefully now be £80-90 a month better off which is a significant amount when you’re on a tight budget!
This post is not intended to be a moan about nurseries adding on extra fees – in fact I fully sympathise that if the government do not fully fund the places then it is putting their livelihoods in jeopordy. I found this infographic very informative.
I also cannot praise our nursery highly enough for the standard of care and education my daughter has received so far. I am also eternally grateful to have received free childcare a day a week from grandparents saving us another £200+ a month and enabling me to work 3 days and not give over a greater chunk to childcare costs.
However – if you are currently the parent of a 2 year old and are planning which dream holiday to book once your free hours kick in, it might be worth checking what the cost will work out to be first!
Have you found this post interesting? Does it work differently with your childcare provider? Let me know in the comments below!
Read more from me on the subject of childcare over at The Money Shed.
I’m taking part in the Mummy Monday linky with Becca from Becca Blogs It Out